Yes, I totally agree — I've lost hours of work repeating my edits and trying to solve this one. I totally get the concept of a "Magic Movie" is to more or less 'automagically' through machine learning etc. create a beautiful movie for you: you just give it some clips, pick a theme ("style"), some music, and voila!
However, there are controls for tuning and refining not just the theme and so on, but individual clips (with the clip duration displayed down to 1/10th of a second)... that allows for some pretty fine tuning. Why include such features if it only works half the time as @attilathehungarian points out (and for me it's about 10% of the time)!
What's most baffling however is when scouring the community boards, Reddit, Google, etc it seems this is not a common complaint. I spent probably 6-8 hours searching for someone to have this exact same issue before I found this post. So, it makes me wonder if it only occurs under certain use conditions.
For example, just 30-min ago I found a thread wherein Rich was trying to help someone a few years ago with recovering iMovie backups on his Mac. The (insightful) suggestion was to always keep your projects local (not in eg. iCloud drive). I tried that with Magic Movie, but alas no luck — the edits were still not saved when exporting and re-importing the project locally (and obviously exporting / importing the project itself was just my feeble workaround attempt at preserving my edits, since iMovie is constantly auto-saving changes to a project).
@attilathhungarian, did Apple confirm or give any indication they considered this a bug?